Facts and The Financial Crisis

Great post by Roger Kimball and the collective head in the sand over the "bailout"

“Those who cannot remember the past are condemned to repeat it.”–George Santayana

What would Santayana (1863-1952) say were he with us today? Although born in Madrid, Santayana lived and taught in the United States for decades, an amused, slightly detached observer of the human panoply and its addiction to folly. Recalling the disater of the Carter years–the economic dégringolade (remember the “misery index“?), the foreign policy disasters (remember the Iran hostage crisis?), recalling above all the hang-dog, defeatist attitude of the Carter years (remember the “malaise” speech?)–Santayana would doubtless have shaken his head as so many Americans (and even more, so many Europeans) are loosing their heads over Barack Obama.

Here, after all, is a man who is a distillation of Jimmy Carter, George McGovern, and Bill “the bomber” Ayres. On taxes. On foreign policy. On free speech. On government entitlements. On all this and more Obama is the most left-wing candidate in the history of the Republic. And yet he is greeted with open arms not only by self-confessed revolutionaries like Bill Ayres but by Mom and Pop Democrat in a taxing district near you.

How do you explain it? Bush Derangement Syndrome (exacerbated by Palin Hysteria Syndrome)? In part. There is also a large quantum of liberal guilt operating, an emotion that Team Obama has been quick to capitalize on.

Ask yourself this: What is the thing a good liberals feel most guilty about? Racism. Yes, they feel guilty being American, especially if they are well to do; the men among them feel guilty about being men, just as the heterosexuals feel guilty about their sexual orientation. But in the great sweepstakes of guilt, race trumps everything. Obama comes wielding all the usual left-wing nostrums about “fairness” (i.e., what’s yours is his, or at least the government’s) and “sharing” and getting along with and talking to our enemies. But what he offers above all is expiation for the imagined taint of racism.

The liberal says: “We have sinned. We are guilty. Please absolve us of our wrong.”

Team Obama says, “Sure, but it’s going to cost you.”

Part of the cost seems to be a simple recognition of historical truth. Thomas Sowell touched on this yesterday when he wondered, not without exasperation, whether facts still mattered in our political life. The current economic crisis seems to have benefitted Obama in the polls. But how could that be? Sowell reminds us of some forgotten facts:

Fact Number One: It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years– including the present year– denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis. It was Senator Dodd, Congressman Frank and other liberal Democrats who for years refused requests from the Bush administration to set up an agency to regulate Fannie Mae and Freddie Mac. It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today’s financial crisis. Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush’s Secretary of the Treasury, five years ago.

Yet, today, what are we hearing? That it was the Bush administration “right-wing ideology” of “de-regulation” that set the stage for the financial crisis. Do facts matter?

Read the whole thing.